3M to Acquire M*Modal’s Technology Business

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Public Company Information:

"This acquisition builds on our strategic commitment to invest in our Health Information Systems business and expands the capabilities of our revenue cycle management and population health priority growth platform"

ST. PAUL, Minn. & FRANKLIN, Tenn.--(BUSINESS WIRE)--3M today announced that it has entered into a definitive agreement to
acquire the technology business of M*Modal, for a total enterprise value
of $1.0 billion. M*Modal is a leading healthcare technology provider of
cloud-based, conversational Artificial Intelligence (AI)-powered systems
that help physicians efficiently capture and improve the patient
narrative so they can spend more time with their patients and provide
higher quality of care.

“This acquisition builds on our strategic commitment to invest in our
Health Information Systems business and expands the capabilities of our
revenue cycle management and population health priority growth
platform,” said Mike Vale, executive vice president, 3M Health Care
Business Group. “Together, we will enable doctors to improve the patient
experience, while enhancing documentation accuracy and operational
efficiency for both providers and payers.”

“We are excited that we can further accelerate our mission of creating
time to care for more clients with the resources and global reach of
3M,” said Michael Finke, president of M*Modal. “By combining
capabilities, we can more quickly deliver on our mission of bringing
conversational AI and ambient intelligence directly into clinical
workflows. This is a great outcome for our clients, partners and team.”

3M will maintain a strategic business relationship with M*Modal’s
remaining transcription, scribing and coding services business, which is
not part of this transaction, to help ensure continuity and strong
customer support. Annual revenue of M*Modal’s technology business is
estimated to be approximately $200 million.

3M Health Information Systems (HIS) business works with more than 8,000
healthcare organizations worldwide, both providers and payers, to
deliver software and services across the continuum of care. 3M HIS
offerings – which include the 3MTM 360 EncompassTM
software platform – combine clinical documentation systems and risk
assessment methodologies to help accurately capture, analyze and advance
patient information.

On a GAAP reported basis, 3M estimates the acquisition to be $0.10
dilutive to earnings in the first 12 months following completion of the
transaction. Excluding purchase accounting adjustments and anticipated
one-time expenses related to the transaction and integration, 3M
estimates the acquisition to be neutral to earnings over the same period.

The effective enterprise value multiple is approximately 10 times
estimated annual adjusted EBITDA for the first 12 months following
completion of the transaction, including expected run rate synergies.

The transaction is expected to close in the first half of 2019, subject
to customary closing conditions and regulatory approvals.

Approximately 750 employees supporting the technology business of
M*Modal are expected to join 3M upon completion of the transaction. The
business is based in Pittsburgh, Penn.

Forward-Looking StatementsThis news release contains
forward-looking information about 3M's financial results and estimates
and business prospects that involve substantial risks and uncertainties.
You can identify these statements by the use of words such as
"anticipate," "estimate," "expect," "aim," "project," "intend," "plan,"
"believe," "will," "should," "could," "target," "forecast" and other
words and terms of similar meaning in connection with any discussion of
future operating or financial performance or business plans or
prospects. Among the factors that could cause actual results to differ
materially are the following: (1) worldwide economic, political, and
capital markets conditions and other factors beyond the Company's
control, including natural and other disasters or climate change
affecting the operations of the Company or its customers and suppliers;
(2) the Company's credit ratings and its cost of capital; (3)
competitive conditions and customer preferences; (4) foreign currency
exchange rates and fluctuations in those rates; (5) the timing and
market acceptance of new product offerings; (6) the availability and
cost of purchased components, compounds, raw materials and energy
(including oil and natural gas and their derivatives) due to shortages,
increased demand or supply interruptions (including those caused by
natural and other disasters and other events); (7) the impact of
acquisitions, strategic alliances, divestitures, and other unusual
events resulting from portfolio management actions and other evolving
business strategies, and possible organizational restructuring; (8)
generating fewer productivity improvements than estimated; (9)
unanticipated problems or delays with the phased implementation of a
global enterprise resource planning (ERP) system, or security breaches
and other disruptions to the Company's information technology
infrastructure; (10) financial market risks that may affect the
Company’s funding obligations under defined benefit pension and
postretirement plans; and (11) legal proceedings, including significant
developments that could occur in the legal and regulatory proceedings
described in the Company's Annual Report on Form 10-K for the year ended
Dec. 31, 2017, and any subsequent quarterly reports on Form 10-Q (the
“Reports”). Changes in such assumptions or factors could produce
significantly different results. A further description of these factors
is located in the Reports under "Cautionary Note Concerning Factors That
May Affect Future Results" and "Risk Factors" in Part I, Items 1 and 1A
(Annual Report) and in Part I, Item 2 and Part II, Item 1A (Quarterly
Reports). The information contained in this news release is as of the
date indicated. The Company assumes no obligation to update any
forward-looking statements contained in this news release as a result of
new information or future events or developments.

About M*ModalM*Modal is a leading healthcare technology
provider of advanced clinical documentation solutions, enabling
hospitals and physicians to enrich the content of patient electronic
health records (EHR) for improved healthcare and comprehensive billing
integrity. As one of the largest clinical transcription service
providers in the U.S., with a global network of medical editors, M*Modal
also provides advanced cloud-based Speech Understanding™ technology and
data analytics that enable physicians and clinicians to include the
context of their patient narratives into electronic health records in a
single step, further enhancing their productivity and the cost-saving
efficiency and quality of patient care at the point of care. For more
information, please visit www.mmodal.com,
Twitter,
Facebook
and YouTube.

About 3MAt 3M, we apply science in collaborative ways to
improve lives daily. With $32 billion in sales, our 91,000 employees
connect with customers all around the world. Learn more about 3M’s
creative solutions to the world’s problems at www.3M.com
or on Twitter @3M or @3MNews.